Finding and keeping good tenants is one of the most important aspects of owning rental properties. After all, tenant turnover is expensive and extremely time-consuming, which can majorly affect your bottom line as a landlord. That said, finding great tenants is just the start–keeping them is another battle landlords must be willing to take on. Today, we’ll go over some simple tips for increasing tenant retention so you can ensure a profitable property in 2024.
Contents of This Article:
- Why Is Tenant Retention Important?
- How to Calculate Tenant Retention Rates
- Tips for Increasing Tenant Retention in 2024
- How Can Professional Management Help?
Why Is Tenant Retention Important?
Tenant retention is crucial for landlords and Northern Virginia property managers for several reasons. When you have dependable tenants living in your properties and a dedicated property management company to do most of the heavy lifting, you can sit back and watch the rental income roll in. However, that doesn’t mean you can eliminate the thought of vacancies.
Filling vacancies can be expensive and time-consuming. After all, you must consider the costs of marketing, leasing fees, and the time your unit is empty, meaning you’re missing out on rental income. Unfortunately, the average unit turnover and marketing process can leave a unit vacant for around 30 to 45 days or longer, and the average turnover costs for rental properties can range from $1,000 to $5,000.
You’ll want to focus on increasing tenant retention to save time and money. But first, knowing where you’re at and how you can improve your tenant retention rate is important.
How to Calculate Tenant Retention Rates
If you’re looking for ways to increase tenant retention, it’s important to understand your current tenant retention rate. After all, how can you improve if you don’t know where you currently stand? Luckily, finding your tenant retention rate isn’t too difficult. You can measure your tenant retention rate with these simple steps.
- Total how many tenants you have at the start of a period
- Total how many tenants you have at the end of a period
- Divide the ending number by the starting number
- Multiply by 100 to get your % tenant retention rate
For instance, if you have 150 tenants at the start of March and 135 tenants at the end of March, your tenant retention rate for that month is 90%. Once you have this number, you can compare it with other months or previous years to see where you may be able to improve.
Tips for Increasing Tenant Retention in 2024
Striving to increase tenant retention rates in 2024 doesn’t have to be complicated. There are several simple ways to keep your tenants happy and satisfied with their living conditions. Here are some tips for landlords and property managers to follow for increasing tenant retention in 2024.
- Conduct Thorough Tenant Screenings
- Prioritize Maintenance and Rental Upkeep
- Make Rent Collection Easy
- Keep Rental Rate Increases Fair and Consistent
- Offer Lease Renewal Incentives
- Maintain Open Lines of Communication
- Build a Strong Landlord-Tenant Relationship
- Work With Reputable Property Managers
Conduct Thorough Tenant Screenings
If you’re not starting with a thorough tenant screening process, retention rates will be the least of your worries. Tenant screening is one of the most important parts of the rental process and greatly impacts tenant turnover rates. So, before you choose a tenant, verifying their income, credit, and criminal background information is crucial. Additionally, it helps to contact their previous landlords or other references to learn more about who they’ll be as a renter.
Prioritize Maintenance and Rental Upkeep
No tenant wants to live in a poorly maintained, outdated rental property. Regular maintenance and upkeep are essential for retaining tenants.
For instance, you’ll want to promptly address any maintenance concerns or requests and ensure utilities are in working order. Additionally, it’s important to perform routine inspections, address repairs promptly, and invest in necessary upgrades to keep the property in good condition. This not only enhances the living experience for tenants but also shows your commitment to their comfort and satisfaction.
Make Rent Collection Easy
When collecting rent from tenants, make it as simple as possible. There are several ways to make rent payments more convenient, like offering online payments, automated billing, or electronic fund transfers. By making the process easy and hassle-free for tenants, you can reduce the likelihood of late payments and improve overall tenant satisfaction.
Keep Rental Rate Increases Fair and Consistent
Everyone knows that profits are essential for a rental property business. However, being overly aggressive with hikes and increases will likely drive tenants away instead of encouraging them to stay in your rentals. While tenants can expect periodic increases, it’s important for landlords to keep them fair and consistent. Additionally, you’ll want to communicate any planned rent increases well in advance and ensure the current market conditions and property improvements justify them.
Offer Lease Renewal Incentives
The end of a tenant’s lease is a crucial time for landlords and property managers. After all, tenants are likely weighing the pros and cons of renewing their lease or moving out. While there may be some circumstances, like a job change, that can influence a tenant’s decision, it’s still a good time for landlords to make staying worthwhile. So, encourage tenants to renew their leases by offering incentives like rent discounts, upgrades, or additional amenities.
Maintain Open Lines of Communication
Open and honest communication is one of the simplest ways to increase tenant retention rates. So, keep tenants informed about important updates, policy changes, or upcoming maintenance work.
Additionally, when tenants contact you with concerns, questions, or maintenance requests, answer them within the same business day. Then, during the maintenance or repair process, keep them updated so they know that the situation is being handled. Communication is key!
Build a Strong Landlord-Tenant Relationship
The last thing you or your tenants want is to have a poor relationship with one another. When tenants feel like their landlord is disrespectful or neglectful, they likely won’t be running to renew their lease when it ends. At the same time, you wouldn’t want an irresponsible tenant staying in your property. So, work to build a strong landlord-tenant relationship by listening to their concerns, addressing their needs promptly, and resolving issues respectfully.
Work With Reputable Property Managers
If you own several rental properties or you’re unable to keep up with the daily tasks of being a landlord, consider hiring a reputable property management company. Experienced property managers can handle day-to-day operations, tenant communications, maintenance tasks, and lease renewals on your behalf. Additionally, they ensure top-notch communication and customer service, keeping your tenants well-informed and up-to-date.
How Can Professional Management Help?
Increasing tenant retention rates helps save tons of time and money in turnover costs. However, it’s important to create a good rental environment with incentives for your tenants to stay. One of the best ways to ensure your properties are up-to-date and your tenants are satisfied is by hiring a professional property management team.
Professional Property Management of Northern Virginia is here to help! Our team of dedicated property managers can help you find qualified tenants and ensure your properties are well-maintained 24/7! Contact PPM today to learn more about our property management services and how they can help your rental business.
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